Samsung Hammered for Leak of Licensing Info

     SAN JOSE, Calif. (CN) – Samsung’s intentions aside, its leak to thousands of confidential licensing agreements between Apple and Nokia will cost the South Korean giant more than $2 million.
     U.S. Magistrate Judge Paul Grewal revealed nearly a year ago that the disclosure occurred during the massive discovery ahead of the first iPhone-Galaxy patent trial in 2012. It involved Samsung’s outside counsel sending thousands of Samsung employees unredacted key terms of Apple’s licensing agreements with Nokia, Ericsson, Sharp and Philips, despite a protective order.
     Samsung’s outside counsel from the firm Quinn Emanuel posted the information on an FTP site accessible by Samsung personnel and emailed employees with access instructions for the site, Grewal said. Then the lawyers emailed the agreements – marked “Highly Confidential, Attorney Eyes Only” – several times to more than 50 different Samsung employees and high-ranking licensing executives.
     After privately examining hundreds of documents related to the incident, Grewal ordered Samsung to reimburse Apple and Nokia for the costs of litigating the discovery breach. He declined, however, to slap the South Korean company with the deeper sanctions for which the other companies rallied.
     Samsung lawyers have since been battling Grewal’s findings, calling on U.S. District Judge Lucy Koh to reduce the costs-and-fees award by at least 50 percent. It has also balked at a finding that the company waived its right to claim privilege for several documents that Grewal examined after the discovery fracas.
     Although both Apple and Nokia blasted Samsung for using privilege to duck the sanctions, Koh agreed Friday that Samsung did not give up its privilege claims simply by offering to turn over documents to Grewal.
     “Samsung’s offer to produce the seven documents – an offer that was not even accompanied by an offer to waive privilege as to those documents, given that Samsung expressly conditioned its offer on Apple’s and Nokia’s stipulation that producing the documents would not constitute a waiver of privilege and/or work-product protection – did not waive privilege as to those documents because the documents were not ultimately produced,” Koh wrote. “The court therefore finds that there was no waiver of privilege based on the stated rationale for the waiver finding in the sanctions order.”
     Grewel meanwhile must decide for himself whether Samsung waived privilege for other reasons – as Apple and Nokia argued, the ruling states.
     Koh agreed with Nokia, however, that Grewal made the wrong decision by examining the Samsung documents privately without letting Nokia review the evidence itself.
     “Under the circumstances in this case, Judge Grewal faced the delicate task of balancing Apple’s and Nokia’s allegations of misconduct against Samsung’s ‘equally serious charge that the attorney-client privilege and work-product protections applicable to these documents would otherwise be breached without cause,'” Koh wrote, citing Grewal.
     “In balancing these concerns, Judge Grewal conducted a comprehensive review of Samsung’s documents in camera to determine the scope of Samsung and Quinn Emanuel’s violations of the protective order, and the appropriate breadth of sanctions,” she continued. “However, Nokia has not received access to those materials. While Judge Grewal denied Nokia’s motion to compel production of Samsung’s allegedly privileged documents, he did not address all of Apple’s and Nokia’s arguments regarding Samsung’s waiver of privilege (other than deciding that Samsung waived privilege as to the seven documents that Samsung offered to produce), nor whether all of the documents submitted in camera were in fact privileged. Accordingly, the court finds that the appropriate course is to remand for determination of whether the Samsung documents at issue are privileged and – if so – whether due process requires that Nokia receive access to, or information regarding, those documents. As a result, the court concludes that Nokia’s request for reversal of Judge Grewal’s finding that there was insufficient evidence to show that Samsung had used Nokia’s confidential information is currently premature.” (Parentheses in original.)
     As to the costs and fees – nearly $1.15 million for Nokia and $894,000 for Apple – Koh reminded Samsung that the figure was meant as a sanction for its “transgressions” and intended to reimburse the other two companies for the costs associated with litigating the affair.
     “Even if Samsung had presented convincing reasons for reducing the overall award, Samsung provides no quantitative basis for reducing the total sanctions amount ‘by at least 50 percent,'” Koh wrote. “Moreover, Judge Grewal reviewed Apple’s and Nokia’s expense statements in detail – including seven specific items that Samsung challenged – and identified 20 individual billing records that warranted partial reductions. Samsung fails to identify any clear error in these calculations.”
     In a separate ruling Friday, Koh also ordered Samsung to pay nearly $1.9 million in costs from the first Apple-Samsung melee in 2012 – a far cry from the $5.7 million Apple had sought.
     The bulk of the reductions came from the Apple’s claimed costs for making exemplifications and copies – a whopping $4.7 million. Koh said the company didn’t show how many of those copies were produced for Samsung, and “given the lack of appropriate documentation the court denies Apple’s requests for copying costs in its entirety.”

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